Cisco Service Provider Video Segment Grows 12% in Fiscal 2016

Posted by Josh Stinehour
Aug 17 2016

Cisco announced its 2016 fiscal year results for the twelve months ending July 30, 2016.  In its financial reporting Cisco breaks out the results of its Service Provider Video (“SPV”) product segment. Cisco_logo

With Cisco’s divestiture of its CPE business to Technicolor, the SPV segment reporting offers greater visibility into Cisco’s products targeted to media customers.  Those product categories span Cable Access Products, Cloud-based video solutions, Content Security, Content Management and Distribution Products, Digital Headend, and Virtualized Video Processing Systems.

Many of these product categories were acquired in a series of M&A transactions in the media technology sector including 1 Mainstream (2015), NDS (2012), BNI Video (2011), Inlet (2011), Extend Media (2010), and Scientific Atlanta (2005).

When excluding revenues from the divested CPE business, the SPV segment had revenues of $1,920 million for the 2016 fiscal year, an increase of 12% over the 2015 fiscal year.  As a percentage of Cisco’s total product sales (not including services revenue), SPV represented 5.2% in FY2016 and 4.7% in FY2015.

The 2016 fiscal year results benefited from an especially strong second quarter driven by sales of video solutions and cable access products in China.

Fiscal Fourth Quarter 2016 Results:

For the fiscal fourth quarter, Cisco’s SPV segment had revenue of $444 million, a decline of 12% versus the fourth quarter of 2015.  SPV accounted for 4.6% of Cisco’s product revenue in the fourth quarter, a decline versus the contribution of 5.3% in the fourth quarter 2015.

Again, the above figures only include revenues for the continuing operations of the SPV segment.

 

Update on Cisco’s Broader Activities in Media Technology Sector

Not captured in the SPV segment are the sales of Cisco’s general-purpose technologies such as switchers and blade servers in the media sector.  Cisco has been an active contributor to the virtualization and IP transition efforts in the media technology industry.

Cisco’s CTO of Engineering and Chief Architect Dave Ward gave a presentation as part of the ImagineLIVE Power Sessions at the 2016 NAB Show.  During the presentation, Mr. Ward reviewed Cisco’s perspectives on the future of technology architecture in the media sector and Cisco’s role in that architecture.

 

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When referring to the above slide, Mr. Ward offered background on the high-level focus of Cisco in the media sector. “The target that we have for the industry and the target that we work on with Imagine is actually all at the top layer.  At the top layer creating a Media Platform-as-a-Service (PaaS) where a media workflow engineer – or any independent part of those workflows – those engineers can focus on doing their jobs and the stack and the network can take care of themselves” said Mr. Ward.

Later in the presentation Mr. Ward provided a more detailed review of the technology architecture supporting the Media PaaS target along with an overview of where Cisco’s technology would fit into that architecture.

 

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The blue line in the above slide represents the divide between where Cisco will focus and where Cisco will partner with other vendors – in this instance with Imagine.  As stated by Mr. Ward, “Imagine’s job is everything above that layer [blue bar] and what I’m trying to build is everything below that. A self- managing orchestrated reactive system that can allocate resources, can engineer admission control into an IP datacenter and across the WAN, and make it all as easy as possible.”

 

 

Related Content:

Press Release: Cisco Fiscal Year 2016 Results

 

 

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